India Aims to boost trade with neighbours

India plans to lower tariffs on goods and services to boost trade with Southeast Asian nations, a senior Indian official said. "India’s image as a closed, slow moving economy is changing and the Association of Southeast Asian Nations wants to capitalize on our geographical proximity," Rajiv Sikri, a senior official with India’s foreign ministry said.

India announced a "look East" policy nearly 10 years ago to improve trade with Asian nations, which mostly concentrated on the United States and Europe. The policy has largely failed because of the slow pace of reforms to open the Indian economy.

India recognizes that trade with the 10 ASEAN nations is falling far short of its potential, Sikri said, adding that India in turn received little direct investment from Southeast Asian neighbours. India’s exports to ASEAN nations totaled $ 3.2 billion in 2001-2002, accounting for nearly 7 percent of total exports; while ASEAN member-states shipped around $ 6 billion in goods and services to India in the same period, according to a recent study on India-ASEAN trade by the international consulting firm McKinsey & Co. Over the past decade, India’s exports to ASEAN nations have tripled, spurred by lower import duties and relaxed foreign exchange controls.

Indian industry grows by 6.4

Setting aside all talks of economic slowdown, industrial sector reported a stupendous performance in the month of July registering a growth of 6.4 percent as against 2.6 percent in the same month 1st year.

The major recovery was led by a robust growth of 5.7 percent in the manufacturing sector, which is up from 2.9 percent in July last year, according to Quick Estimates of Index of Industrial production (IIP) released by central statistical organization recently.

The cumulative growth during first four months of the current financial year also witnessed a sharp recovery at 4.7 percent compared to 2.3 percent in the corresponding period last fiscal.

The manufacturing sector recorded cumulative growth of 4.3 percent over 2.7 percent during the period under consideration.

The mining sector was the real turnaround and registered a growth of 12.5 percent against negative performance of 2.6 percent in the same month in 2001. Electricity sector also witnessed a jump to 6.2 percent.

75% of Bangladesh's aid plundered

Only one quarter of the more than 36 billion dollars in aid Bangladesh has received since independence in 1971 has actually gone to the poor, a research paper said recently.

"Since independence in 1971, 75 percent of the total aid received was plundered and the poor, who are the actual target group, were deprived," said the study by Dhaka University professor Abul Barkat.

"The foreign assistance failed to play a vital role in the country’s economy that could be of welfare to the people," it said.

"Rather it acted as a medium of economic and political criminalisation through accumulation of money in the hands of the vested quarters."

Barkat said that of the 36.33 billion dollars in aid Bangladesh has received since independence from Pakistan in 1971, foreign consultants took away 25 percent while Bangladeshi politicians, bureaucrats, commission agents and contractors got another 30 percent.

Another 20 percent of the aid earmarked for the poor went into the hands of local elites, the study found.

Major donors including the World Bank have in the past two years changed their system of aid for Bangladesh, replacing usual lumpsum two billion-dollar grants with assistance for select projects.

Pakistan's economy improving

A raft of positive economic indicators as Pakistan heads to its first general elections under the three-year military regime will give the future government a comfortable start, analysts said recently.

Pakistan’s currency and stocks have performed strongly in recent weeks as fears subsided that the October 10 polls would be postponed. "Stocks are behaving positively and the benchmark has reached above 2000 points since uncertainty over the elections has died down," said Arif Habib, a former president of the Karachi Stock Exchange. The all-important key KSE-100 index rocketed 87 percent year on-year in October to close at 2015 points.

Sri Lanka exports recover

Sri Lanka’s exports recovered in August to reverse a negative trend seen since February, the Central Bank said recently.

Exports roe to 568 million dollars, up 33 percent compared to the same month last year, the bank said in a statement. It said imports rose six percent to 458 million dollars in August.

"This is the first positive growth recorded since February," the bank said. However, the trade figure for the first eight months were still lower than the corresponding period last year.

Exports from January to August earned 3.01 billion dollars, down nine percent from last year while imports fell six percent to 3.88 billion dollars.

The trade deficit in the first eight months increased by 866 million dollars.

US, Lanka sign new tax treaty

Sri Lanka and the United States has signed a new tax treaty amending the 1985 bilateral income tax treaty, the state-run Daily News said recently.

The new protocol was signed by US Assistant Secretary of State for South Asia Christina Rocca and Sri Lanka Minister of Science, the US.

The amendments modernize the convention to reflect changes in the laws and policies of both countries since 1985. The amended convention contains provisions to facilitate investment between the two countries by addressing the cross-border payment of investment income, business profits, capital gains and other types of income.